Free cinema tickets, half-price gym membership and cut-price spa breaks are
some of the perks available to those buying health or life insurance

Free cinema tickets, half-price gym membership and cut-price spa breaks are some of the perks available to those buying health or life insurance.

These deals might look attractive, and are advertised by sports stars such as Jessica Ennis-Hill. But they are far from straightforward. As a result it can be difficult to tell whether these policies really offer something for nothing, or are just an expensive way of buying benefits you'll never use.

Of course, banks have been using such tactics for years, offering people "free" travel insurance or car breakdown cover if they switch to a feepaying bank account.

But it is a relatively new phenomenon when it comes to insurance. Prudential is the main player in this market, offering freebies on its private medical insurance, and now its life insurance, income protection and critical illness plans. (Critical illness pays out a lump sum if you are diagnosed with a serious illness, such as cancer; income protection provides a monthly income for signed-off work through ill health.)

You get some of these perks, such as the half-price gym memberships, discounted trainers and a 75pc spa discount, just for taking out one of these policies. Others have to be earned - either by paying an additional monthly fee, or by racking up "points" which are awarded for adopting a more healthy lifestyle. (See below for more details.)

As the table, right, shows, these policies aren't the cheapest on the market. Would-be policyholders should calculate whether it's worth paying a higher premium for the benefits.

Much will depend on your circumstances. For example, the discounted gym membership only applies to Virgin Active and LA Fitness gyms, so do you have one of these outlets near you?

Also, be realistic about how likely you are to use it. Many gym members begin by going three times a week, but this soon tails off. Even paying half-price membership will be expensive if you only go once a month, particularly when you factor in higher insurance premiums as well.

If gym membership costs around £350 a year, this means a £175 saving. According to Regency Health, an insurance broker specialising in private medical insurance, the Pru policy costs an extra £171 a year for a healthy 30-year-old man, when compared with the cheapest PMI policy on the market. So overall the savings are negligible.

However, it is worth pointing out that Aviva charges more for a comparable medical insurance product, and policyholders don't get these fringe benefits.

These perks look better value for money on a critical illness plan, as customers are only paying an extra £90 a year for this product, so should save money, provided they use the gym regularly.

Of course, this is a little oversimplified. There are other benefits to take into account. And those who use the gym regularly also get discounted premiums the following year. But when you drill into the figures closely, the savings aren't significant. For example, the 75pc discount on a Champneys spa day may be notionally worth more than £100, but it's only a saving if you were going to book this treat anyway. Similar discounts are also available online.

To get a discount off next year's premium you need to get at least 800 activity points, and you need to get 2,500 to get the maximum discounts. This gives you a 3pc discount: on an £8 monthly life insurance premium this is worth just 24p. Walking 12,500 steps three times a week, which you can prove with a step-counting gadget, gives you just 600 points.

Brian Walters, the vicechairman of the Association of Medical Insurance Intermediaries, said this was the wrong way to evaluate the "worth" of these policies. He said medical insurance plans were notoriously complex, with different policies covering different conditions and treatments, as well as allowing access to different hospital networks. First and foremost, policyholders should ensure they are getting the right level of cover. If this then comes with added benefits, this should be seen as a bonus.

He said PruHealth offered good cover and the points system was "very innovative". Tom Baigrie, the head of LifeSearch, said the same applied to critical illness products.

"You need to look at what is covered, and in what circumstances the insurance will pay out. The Pru's serious illness policy, for example, will make partial payouts for early-stage cancers, which are excluded on some other critical illness plans." He said the level of cover justified the higher premiums, and customers got the extras on top.

'IT'S A GREAT SAVING'

MIchelle Ford and her partner, Nigel, took out their PruProtect policy in July this year, when they arranged a mortgage for their new homes. Their broker, Genesis, recommended it because of the serious illness cover. But Michelle said they liked the additional benefits. "We've earned almost 800 points already. We particularly like the free cinema tickets, which we use loads, especially when taking Nigel's daughters in the school holiday. We've also got a pair of trainers for half price. We'd have bought them anyway, so it's a great saving."